Tron Inc. Profit Rises 22% to $14.9 Million as Per-Share Earnings Fall

Tron Inc., a Nasdaq-listed toy maker that now holds most of its value in TRX tokens, said Tuesday its third-quarter net income rose 22% to $14.9 million. Basic earnings per share fell to 3 cents from 11 cents.

The gap comes from share count. The company averaged 474.4 million basic shares in the quarter, up from 110 million a year earlier, its quarterly filing shows. Profit grew, but it was split among more than four times as many shares. On a diluted basis, which counts shares that could still be issued, EPS slipped to 3 cents from 4 cents.

Where the profit came from

None of it came from toys. The theme-park merchandise business grew sales to $1.19 million from $1.10 million but still lost $573,354 at the operating level. The profit came from:

• $16.3 million of unrealized gains on its tokens
• $3.18 million of unrealized staking income, up 41%
• a $106,228 realized loss on converting TRX

"Unrealized" means paper gains that rise or fall with the TRX price.

How the staking works: the company deposits TRX with JustLend, a lending app on the Tron network, and gets sTRX back. Each sTRX becomes worth more TRX over time as voting rewards and fees from renting out network "energy" build up. That rising exchange rate is what the company books as staking income.

Who owns it

The tokens were worth $257.8 million on Sept. 30, out of $275.2 million in total assets. Bravemorning Ltd., owned by director Weike Sun, held about 88.5% of the voting power, the filing says. The filing names Sun as the father of Tron founder Justin Sun and flags possible conflicts of interest, including with JustLend and the firm that set up the company's wallet.

The company also signed an at-the-market deal on Oct. 14 to sell up to $200 million of new stock. It had sold none by the filing date. On Oct. 18 it was elected one of the Tron network's 27 "Super Representatives," the validators that produce blocks, which pays rewards in TRX.

In our opinion: this is a token treasury that happens to sell souvenirs, and the 10-Q says so in plain numbers. The figure to follow is the share count, because that $200 million stock program, if used, would split future profits further. The next filing will show whether any of it was tapped.